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Russia is wooing investors as never before, with PM Dmitry Medvedev addressing a high-level group of industries’ leaders with a plea for brainstorming to resolve formidable barriers facing any investor in Russia’s unchartered waters of finance.
At a meeting of the Foreign Investments Advisory Council founded in 1994, Medvedev made a strong case for why the world’ biggest (and lower scale) corporations need to be doing business in Russia.
He spoke of the total $110 billion worth of investment that the council’s members poured into the Russian economy, of the four roadmaps through 2014 to stimulate business activities, extensive privatization plans, growing consumer market, positive GDP growth and new opportunities opening up after the set-up of the Customs Union between Russia, Belarus and Kazakhstan.
He also said the government was about to approve 50 big investment projects with a total worth of about 11 billion U.S. dollars. In 2011, direct investment rose 22% against 2010 figures, he added.
As part of self-criticism, Medvedev voiced the results of the opinion poll among foreign businesses operating the countries which said that only one third of investors considered the national investment climate as favorable.
Medvedev urged senior executives to invest not only in gas and oil sectors but consider other profitable areas.
The PM also asked international companies operating in Russia to press their governments to facilitate the liberalization of the visa regime with Europe. Russia has long pushed for a visa-free travel agreement, but as Medvedev pointed out, “some countries still hamper the process.”
The response by the fat cats was polite but edgy. They praised the government’s efforts to improve business climate in the country but also offered criticism of the red tape, confusing regulations and poor infrastructure impacting transportation costs.
Robert A. McDonald, President and Chief Executive Officer of Procter & Gamble, drew the premier’s attention to the transport issues, saying transportation costs are 50 percent higher in Russia compared with Europe, and depreciation rates are three times as high as in the EU.
Peter Brabeck-Letmathe, chairman of the board of directors, Nestle, focused on flawed technical rules for packaging materials.
Richard Burrows, from British American Tobacco, slammed construction and outdated sanitary rules.
President and Chief Executive Officer of Siemens AG, Peter Löscher, complained of high imports duties for spare parts and lack of the government support for new technologies.
More concern was voiced by Stefan Wagstyl in his blog on the Financial Times, pointing out slower industrial output and growing red tape.
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Author: Mikhail Vesely
